From Texas, I mostly cover the energy industry and the tycoons who control it. I joined Forbes in 1999 and moved from New York to Houston in 2004. The subjects of my Forbes cover stories have included T. Boone Pickens, Harold Hamm, Aubrey McClendon, Michael Dell, Ross Perot, Exxon, Chevron, Saudi Aramco and more. Follow me on twitter @chrishelman.

Supreme Court Victory Gives EPA More Ammo In War On Coal

The Supreme Court ruled 6-2 yesterday that the Environmental Protection Agency does have the authority to regulate power plant emissions that cross over state lines. Under the so-called “good neighbor” rule, a coal-fired power plant in, say, West Virginia, will be liable for damage caused by mercury or sulfur dioxide that ends up in Pennsylvania.

The court thus approved the EPA’s Cross-State Air Pollution Rule (CSAPR), which had been vacated by the U.S. Court of Appeals back in August 2012. That temporary setback wasn’t much of a speedbump for the agency, which instead put in place something called the Clean Air Interstate Rule (CAIR), and also toughened its Mercury and Air Toxic Standards (MATS).

One way or another, the EPA was determined to put the screws to coal-fired power plants. As a result — notes Bernstein Research analyst Hugh Wynne this morning — the Supreme Court ruling will have “a very limited impact on the U.S. coal fired fleet.”

That’s because power plant owners had already been planning to upgrade or shut down coal-fired plants to meet the requirements of CAIR and MATS. According to Bernstein Research, only Texas’ plants are likely to have emissions of sulfur dioxide exceeding the CSAPR standards. While only Missouri’s plants would violate its nitrous oxide emission rates. In both states power plants could meet their CSAPR requirements by increasing their use of sulfur scubbing technology and nitrous oxide control systems — and also by burning lower-sulfur coal.

Importantly, the Supreme Court decision effectively kills any hope that the power utility companies had of keeping the EPA at bay. After eight years of legal efforts to resist ever greater regulation, especially as pertains to limits on carbon dioxide, the utilities have been defeated on every front.

Andy Weissman, senior energy advisor at lawfirm Haynes & Boone, said in an email today that one of the most lasting implications of the court’s decision is that it could embolden EPA to be more aggressive in imposing its own emissions-reduction plans on states (like Texas) that resist proposing their own plans pursuant to EPA rules. A key test could arise in June, when EPA is expected to propose major restrictions on power plant emissions of CO2. In the wake of the Supreme Court’s decision, EPA is likely to use its authority “as a hammer to attempt to force states to impose tough CO2 restrictions on coal-fired plants,” says Weissman. Texas Gov. Rick Perry has insisted that if EPA is allowed to impose its will on Texas it could mean the crippling of the Texas economy. The ongoing oil and gas boom in Texas has meant the tripling of oil output since 2007 to nearly 3 million bpd.

But lest you think that the EPA has now effectively won the War On Coal, think again. As I detailed in an article last week, coal remains the source of 20% of America’s energy supply — accounting for 8 times the energy from all the nation’s wind and solar generation combined. Such a giant energy source cannot simply be eliminated without first building ample (and expensive) new generation capacity. The EPA can keep fighting coal, but unless the nation is willing to endure massive electricity blackouts, coal will remain a huge piece of the U.S. power generation pie for decades to come.

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——” The EPA can keep fighting coal, but unless the nation is willing to endure massive electricity blackouts, coal will remain a huge piece of the U.S. power generation pie for decades to come.”———

Oscar (my bologna has a first name……..)

In most cases, it is cheaper and faster to build an entirely new plant that uses natural gas that has none of the pollutants that coal does than it does to try to retrofit old coal plants with pollution controls.

This is what’s called the “MATS Conundrum”. For thjose that have heard me speak about “Old Smokey Power” and “Upthe Creek Station” (ficticious facility based on a fleetwide coal study I worked on), you see how important fuel diversity is. In this analysis I compare the costs of retrofitting a 300MW coal plant built in the 60′s to meet EPA regulatory requirements to building a 300MW combined cycle plant that is gas fired – I also go through the value of the plant via decon/demo and look at retrofitting the boiler to co-fire NG with coal to hedge fuels. The costs to retrofit compared to b uilding a CCGT plant turn out to be very close on $/KW basis. Once you switch to nG you cannot go back to coal in this environment and you are gambling that NG will be less than $6-$7/mmbtu for the next 20 yrs. Haven’t we been down this road before in the last 90′s and early 2000′s. Shale gas is a game changer, I agree, but it all comes down to supply and demand. What happens when LNG exports start kicking in and all the chemical plant expansions are built that use NG as a feedstock to their products? Look at what happened with the polar vortex we had this year – NG spiked up to $100/mmbtu in the New England states. NG is flared in the Bakken shale play and not captured to storage. We have to look at the whole big picture here folks and not be blinded.

NG does work well with wind and solar for load following Fred because you can ramp up an engine or gas turbine in less than 10 minutes with the latest combustion technology today. This cannot be done with coal.

yes it’s a diverse fuel mix that leads to grid instability AND when gas prices increase to >$10/MMBTU I guess you’ll be happy paying $0.20 – $0.30/kwh at your home. Coal balances it out such this country enjoys low utility costs.

Really, do you know what a developer has to do to build a wind farm or solar farm? Do you know the carbon footprint of the entire process to build a wind or solar farm? Do you know the amount of land those sources of power takes up? Do you know the environmental impacts of these sources? Wetlands, endangered species, bald eagles and other bird kills with wind. BLM has stringent requirements for siting these facilities on government owned lands as well. Wind/solar would not be built without government subsidies called the PTC due to the high capital costs. #Fueldiversity

If you build a wind farm on wetlands, it will not only be hard to get to for maintenance, it will probably fall over.

If you put solar panels on rooftops—you don’t need any land at all.

Environmental kills? Coal leaches poisons into the watershed long they are abandoned and forgotten. They kill fish in the millions routinely and poison the land so that it is a barren waste land. Strip mine destroy the topography and top soil, they not only destroy everything that was there—-they destroy all the wildlife for a hundred years or more in the future. Nothing will grow there and there is nothing for them to eat. It creates vast areas of man made dead zones———even the harshest of natural desert environments supports thriving communities of life.

I grew up in a coal mining area, you need not waste your breath lecturing me on how strip mines are better for the environment than wind turbines. If there are some birds killed by wind turbines—at least it is because there are birds there. With coal mines, you won’t even have that if the coal mine owners have their way.

———” Wind/solar would not be built without government subsidies called the PTC due to the high capital costs.”——–

Ever heard of Emminent Domain? You wouldn’t have coal mines without it—-and you are paying for that. In more ways that just money. BLM land? BLM lands belong to ALL citizens—-but I don’t recall there EVER being an election asking the citizens if they approved of the destruction of the land they own make a strip mine for private profit.

yup, emminent domain, sure have…..pipelines and transmission lines and wind farms it becomes an issue…Coal is what built this country my friend with the industrial revolution and we came a very long way ..supercritical boilers can achieve 1450 lbs CO2/MW, very close to what the EPA wants to achieve at 1100 lbs/MW. We can build zero emission power plants, the public just has to pay for it….FutureGen as an example. Kemper County is over $5 Billion and guess who is paying that? the rate base. Heres an op ed in the WSJ today where Sen. Lamar Alexander, R-Tenn., describes the federal wind-production tax credit as “Washington’s most conspicuous, wasteful taxpayer subsidy,” arguing that wind energy should now stand on its own in the marketplace after receiving the subsidy for a long time. “After nearly 22 years, eight resurrections and billions of taxpayer subsidies, it’s time to let the marketplace rule and allow wind power to rise or fall on its own. Save our money, save our nuclear plants and save our mountaintops, : http://online.wsj.com/news/articles/SB10001424052702303678404579540270543985540?mg=reno64-wsj

We have done alot of great things with coal and its byproducts – road base material, backfilling mines, enhancement of concrete products, use in wall board, etc. We know how to reuse this such that it is not a hazard.

Living in Texas, I like to have my air conditioning running in the summer and not intermittently either……

I would argue that the US taxpayers providing the entire care and pension funding to care for coal miners suffering from black lung and their families is far more conspicuous and wasteful. It rewards the mine owners who dodge their liability to their employees by putting money in their pockets—-by paying their bills FOR them.